Front-facing camera? Feh. As far as bells and whistles go, I’d take a smartphone with a built-in projector over one with video chat any day, so I’m happy to see that Sharp is keeping the dream alive, at least in Japan.

MobileCrunch reports that the SH-05C comes with a built-in DLP projector, good for up to two hours of video on the nearest wall. It’ll launch through NTT Docomo, Japan’s largest wireless carrier, in February 2011.

I like the idea of blowing up photos and videos from a phone for everyone to see. Unfortunately, projector phones still have a long way to go before they can become practical additions to top-shelf smartphones. DLP projectors, like the one in Sharp’s phone, aren’t ideal for well-lit rooms — the folks in Sharp’s press shots seem to be hanging out in the dark — and its resolution is a mere 640-by-480. The DLP projector accessory for LG’s Expo, a Windows Mobile 6.5 phone that’s no longer available from AT&T, is even worse, with 480-by-320 resolution.

The real deal in pico projection are lasers, which allow for higher resolutions and longer distances, don’t require manual focus and can operate under normal room lighting. I saw a mini laser projector, made by Microvision, at CES 2010, and it looked pretty good. The problems with pico laser projection right now are cost and battery life; Microvision’s ShowWX projector costs $500, and is only good for 90 minutes to two hours on a charge. And that’s on a standalone device with its own battery.

In the meantime, DLP projectors will have to suffice. Aside from Sharp, Samsung took a stab at it with the Galaxy Beam, which runs Android 2.1 and launched in Asia this summer (CNet Asia gave it a 6.4, but praised the projector itself, which looked fine at arm’s length in a well-lit room). Here’s hoping that manufacturers continue to dabble in projector phones until they’re good enough to stop being a niche product.